Most ISPs in aus are very keen on the whole net neutrality thing (normally very unofficially, but anyways), whoever they do have a legal right to report any and all information as requested by the authorities.
All the different ways of routing are generally flawed, because they use networking protocols that have been around since the idea of networks and the internet began. People know how to use the protocols to help them, but then other people know how to stop them using it.
The sad but true fact, is that the record companies are enjoying massive record sales at the present time, same story with the movie industry. People will always do this sort of thing, its human nature. It just wouldn't be so much of a problem if they didn't make such a big deal of it.